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Powering the Czech Republic

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Centropol Energy was founded in 2002 to supply energy to its parent company, Centropol Holding, a.s., and its subsidiaries. The company also sold electricity and natural gas to other companies based in southern Bohemia, where its thermal power station is located.

Centropol Energy entered the broader electricity market in 2007, where it focused primarily on small and midsized business customers. Then, in 2009, it broadened its focus to include households, now its largest customer group. By 2011 Centropol was the fastest-growing alternative supplier of energy and number one among alternative suppliers to households.

Today, Centropol Energy has 110 employees and four offices in Ústí nad Labem, Plzen, Hradec Krávlové and Brno, each of which manages the firm’s activities in its region. Sales in 2011 totalled 4.5 billion CZK, and the company has just completed a 20 million CZK project to revamp its call centres and improve customer service – a core component of the firm’s strategy.

Business shows no sign of slowing down: Centropol currently captures 50% of all month-to-month energy supplier changes in the Czech market. Benefiting from a highly competitive business environment is unusual for a business; benefiting from competitors’ advertising, even more so. But benefit Centropol does.

Managing Director Lukáš Pokrupa explains that, given the recent liberalisation of the energy market, Centropol’s customers initially did not know they could change electric companies, let alone how to do so. Larger companies’ campaigns to raise awareness of the new rules of the game led to more customers switching suppliers, and many of them – almost 300,000 to date – have switched to Centropol.

“We caught our rivals absolutely unprepared,” says Mr. Pokrupa. A competitive energy market means utilities must develop a marketing strategy in addition to energy infrastructure. Although everyone needs electricity and gas, there are particular challenges to marketing in this industry. Customers can find the technical language associated with energy intimidating, and price competition is intense. Nevertheless, customers do consider other factors when choosing providers, such as services offered and customer care.

In implementing a strategy to inform customers about its offerings, Mr. Pokrupa says that Centropol “uses various forms of all sales channels available.” These include outdoor advertising such as billboards, as well as a lot of personal selling to businesses and door-to-door sales to households. Although the firm does not currently have a social media presence, it plans to establish itself on Facebook and Twitter in the near future.

The success of Centropol and others like it has inspired a good deal of imitation: Recent years have seen a sharp increase in new competitors. Centropol’s management foresees some of its customers being poached by the newcomers this year. But, predicts Mr. Pokrupa, the market will probably soon consolidate to favour major players, and Centropol’s position as the top alternative supplier puts it in a strong position.

Future plans for Centropol include entering the corporate market this year and implementing new strategies to strengthen customer service, which will enable the company to maintain its current standing in the market. Mr. Pokrupa adds that “we have been strongly considering foreign activities,” pointing to Poland, Hungary and Slovakia as possible new markets. Those plans are for the future, though. For now, the opportunities for growth in the Czech market are more than ample.

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